Good roundup piece in PCMag.com on industry and activists’ positions on net neutrality, tied to Monday’s deadline for comments on the Federal Communications Commission’s net neutrality proceedings, “Battle Lines Drawn as Net Neutrality Comments Roll In.”

AT&T’s spokesman on the issue provides the necessary context and a good argument for regulatory restraint.

Jim Cicconi, senior executive vice president for external and legislative affairs at AT&T, accused supporters of manufacturing a threat and failing to identify any real problem that would make net neutrality rules necessary.

“Over and over again, we hear [supporters] cite the single instance where the FCC felt compelled to take action, namely the Comcast-BitTorrent case,” Cicconi said. “But one example does not a compelling case make. Indeed, thanks to the DC Circuit, the Comcast case ironically now stands for the opposite proposition—namely, that government must have compelling reasons if it’s going to substitute its judgment for that of the free market, and when it acts it must do so only with clear legislative authority.”

PCMag.com’s reporter Chloe Albanesius participated in the reporters’ conference call with the NAM, U.S. Chamber and TechAmerica, the trade group.

The FCC needs to reflect and “should refrain from moving forward absent clear congressional authority,” according to NAM’s Marc-Anthony Signorino. The FCC should focus on “fostering innovation and job growth,” he said.

In related news, the Senate Small Business Committee today holds a hearing, ““Connecting Main Street to the World: Federal Efforts to Expand Small Business Internet Access.” FCC Chairman Julius Genachowski testifies.

From The Hill, “Big business groups warn FCC to back off of efforts to push net neutrality plans“:

“The Commission should refrain from moving forward without congressional authority,” said Marc-Anthony Signorino, director of technology policy for the National Association of Manufacturers.

He said the FCC should quickly implement its plan to have a technical advisory board composed of engineers who can “examine the core issues without getting into politics.”

“Had that been in place, the whole Comcast-BitTorrent thing would never have happened,” he said.

The NAM, U.S. Chamber of Commerce and TechAmerica held a conference call with reporters in anticipation of filings with the FCC on the open Internet proceedings.

Elsewhere, Coleman Bazelon of The Brattle Group has completed an economic analysis of the effects of FCC imposition of net neutrality mandates on the broadband industry, “The Employment and Economic Impacts of Network Neutrality Regulation: An Empirical Analysis.” Bazelon identifies economic harm that would result from new regs.

If the network neutrality regulations being considered by the FCC were implemented:
• Revenue growth in the broadband sector could slow by about one-sixth over the next
decade;
• Broadband sector jobs lost could be expected to total 14,217 in 2011, growing to 342,065
jobs by 2020;
• Economy-wide, 65,404 jobs could be put in jeopardy in 2011, with the total economywide
impact growing to 1,452,943 jobs affected by 2020 due to reduced revenue growth
in the broadband sector.

Mobile broadband, the fastest growing segment of the market, would suffer the largest impact, the analysis found.

Bazelon’s research was sponsored by Mobile Future (www.mobilefuture.org).

UPDATE (5:10 p.m.): About The Hill’s headline: The NAM is a big group that represents business, but it is not a big-business group. We have thousands of small and medium-sized companies as members, too. And contrary to some people’s perceptions, net neutrality isn’t just a concern for the big telecom companies. As Broadcasting and Cable reports, citing Marc-Anthony:

Why is the National Association of Manufacturers weighing in? He said it is aw “huge issue” for a number of his members, including companies that manage networks, that make fiber, that dig the trenches, and that make the tools that dig the trenches that hold the fiber.

He also said the businesses are consumers of broadband and want the fast speeds and access that could be discouraged by too heavy a regulatory hand. Essentially, the groups argue the deployment is better driven by the marketplace of investment and innovation, with the regulatory rules of the road explicitly laid out by Congress.

Robert M. McDowell, a member of the Federal Communications Commission, writes in The Washington Post today on net neutrality, “Hands off the Internet.”

Last fall, over dissenting votes from Commissioner Meredith Attwell Baker and me, the FCC proposed rules to regulate high-speed Internet. Before embarking on any regulatory journey, it is critical for the government to ask and answer: What exactly is broken that only the government can fix?

Curiously, the commission proposed rules even though studies by the FCC and the Federal Trade Commission found no evidence of market failure. And when the Justice and Commerce departments filed comments with the FCC in January, neither provided evidence of concentrations and abuses of market power in the broadband arena. To the contrary, the Justice Department sounded optimistic about the competitiveness of the broadband market. It even warned against imposing new regulations “to avoid stifling the infrastructure investments needed to expand broadband access.”

Nonetheless, the FCC may still consider imposing early-20th-century vintage “common carrier” regulations on 21st-century broadband technologies. One result of the new rules could be to make it harder for the operators of broadband “pipes” to build “smart” networks, which offer connectivity and other services or products.

More curiously, the commission proposed the equivalent of new rules even though the commission had no statutory authority to regulate the Internet, or apply “principles” to guide development of the Internet, i.e., regulate the Internet. That’s another reason the U.S. Court of Appeals for the D.C. Circuit’s ruling striking down the FCC’s scheme is beneficial: It’s a reminder to executive branch agencies that are created to perform administrative and regulatory functions. They DO NOT make policy. That’s the responsibility of Congress, the elected legislative branch of government.

The Post’s business columnist, Steven Perlstein, attacks the D.C. Circuit for upholding this separation of powers because it restrains the reach of federal regulators. “Regulatory failure? Blame the D.C. Circuit,” is  a good column if you believe in liberating the regulatory state to do what it was created to do: Serve Steven Perlstein’s view of the world.

Companies and associations released statements following the D.C. Circuit Court of Appeals’ decision in Comcast v. FCC, which held that the FCC exceeded its statutory authority in attempting to regulate that network management practices of broadband providers.

CTIA – The Wireless Association, a statement from President and CEO Steve Largent: 

Today’s unanimous and very thorough opinion in the Comcast case makes clear that the FCC needs to focus on the important task of making the promise of the National Broadband Plan a reality by spurring investment, innovation and job growth, and turn away from calls to impose restrictive regulations on broadband providers and the Internet ecosystem. We look forward to working with the FCC Chairman and Commissioners on these efforts, which are vital to U.S. leadership in the broadband age. This decision from the Court of Appeals suggests that it is time to turn away from murky regulatory debates and focus on connecting all Americans and leading the world in broadband.

Verizon statement, Randal S. Milch, executive vice president and general counsel:

Today’s decision in Comcast vs. FCC will have no impact on the experience of Internet users.  Consumers are in the driver’s seat in today’s market-driven Internet ecosystem, and their interests remain fully protected.  The court recognized that the FCC does have Title I ancillary authority over Internet access.  In this case, the FCC simply failed to link its actions to its statutory responsibilities.  The FCC’s authority supplements the various other consumer protection and competition laws that apply to all members of the Internet ecosystem.\

Comcast statement, Sena Fitzmaurice, vice president of government communications:

We are gratified by the Court’s decision today to vacate the previous FCC’s order.  Our primary goal was always to clear our name and reputation. We have always been focused on serving our customers and delivering the quality open-Internet experience consumers want.   Comcast remains committed to the FCC’s existing open Internet principles, and we will continue to work constructively with this FCC as it determines how best to increase broadband adoption and preserve an open and vibrant Internet.

AT&T statement, Jim Cicconi, senior executive vice president of external and legislative affairs:

AT&T made a commitment to abide by the FCC’s Open Internet Principles when they were first formulated in 2005, and we will continue to do so. Those facts have not been changed by today’s action by the DC Circuit Court of Appeals. AT&T supports an open Internet. That is what our customers count on us to deliver, and we will not disappoint them. (continue reading…)

When the U.S. Court of Appeals for the D.C. Circuit came out with its ruling today stating that the FCC exceeded its authority in slapping Comcast’s wrists for deliberately slowing Internet traffic for a few bandwidth hogs, a number of commentators predicted that this will touch off a flurry of activity from the FCC and, from those bemoaning the current dire state of the Internet, an attempt to get net neutrality back on track.  And if the past year can be taken as prologue, they may get what they’re looking for.

The whole mishigas surrounds two of the core issues that have been around since Al Gore pressed the Internet’s ‘On’ button: Who’s in charge of this thing and When are they going to start ordering me around?   As we can see from the unanimous decision handed down today, the answer to the first question is, Not the FCC. This comes at a very bad time for FCC Chairman Julius Genachowski, as the FCC has a number of net neutrality irons in the fire with the Open Internet Rulemaking and the National Broadband Plan, and this decisionthrows into doubt anything the FCC tries to do to promote net neutrality under its ancillary authority  under Title I of the Telecom Act (i.e., also referred to as the “Because I’m the Mommy and I Say So” doctrine).

Unfortunately, due to the answer of the first question, the answer to the second question just might come sooner than we had expected. The FCC has been seen stroking its collective moustache thoughtfully as some commentators call on them to reclassify broadband service as a Title II communications service (like telephone service), so the commission can assert more authority over it.  Of course, trying to shoehorn broadband into a 19th Century framework like telephone service would be disastrous for obvious reasons, and some not-so obvious reasons.

Right now network providers have an incentive to build out their network to new areas and offer new innovative services because they’re allowed to reap the benefits of their investments.  Manufacturers benefit because they produce the fiber optic cable, the entrenching machinery and tools, the conduit, the servers, the software, and all the sundry nuts, bolts and widgets that go into constructing the vast network.  Plus, as the network gets built out, manufacturers in more remote locations get access to high-speed services.  Workers benefit because jobs are created, not only to make said sundry nuts, bolts and widgets, but in areas where broadband has been newly deployed. (continue reading…)

From Marc-Anthony Signorino, Director of Technology Policy, the NAM’s statement responding to FCC Chairman Genachowski’s speech:

We are concerned that new FCC rules on net neutrality could discourage investment, expansion and research and development by network equipment companies, applications and content firms, broadband network builders and other high tech firms.

We welcome the Chairman’s interest in increasing innovation and investment in high-speed networks because getting more people online working, learning and doing business will be critical to our continued economic recovery. Manufacturers rely on a robust Internet to streamline and economize their daily operations. From cost-saving VoIP to just-in-time manufacturing, high-speed broadband access has made the world a smaller place allowing even the smallest of businesses to operate on a global scale.

Our future economic growth depends on the ability of businesses and individuals to easily secure robust broadband services, not impeded by burdensome regulations. Manufacturers have invested strongly in the Internet – enabling it to become the engine of our innovation economy. We will be working closely with the FCC to assure that its new rules address real issues, and not kill the goose that lays the golden eggs.

It’s the Notice of Proposed Rule Making that will provide the information needed for a more detailed reaction. Perhaps the FCC wants to only scramble the goose’s eggs. Although … with broadbands and pipelines, there’s probably a pate de foie gras metaphor that would apply.

Responses to FCC Chairman Genachowski’s speech proposing a process to arrive at federal “net neutrality” regulations.

The Washington Post reports, “AT&T Says Keep Net Neutrality Rules Off Wireless“:

In response to the announcement, AT&T officials said they would support broadly the principles outlined by Genachowski for their wireline business. They don’t think the rules should apply to wireless.

“We are concerned, however, that the FCC appears ready to extend the entire array of net neutrality requirements to what is perhaps the most competitive consumer market in America, wireless services,” Jim Cicconi, AT&T’s senior vice president of external and legislative affairs, said in a statement.

From The Hill, “FCC chairman outlines net neutrality rules“:

Verizon Vice President of Regulatory Affairs David Young said the company supports an open Internet, but said placing formal rules over network operations could lead “to unintended consequences.”

“We certainly don’t want to see the Internet locked in stone as it is today,” he said. “The Internet needs to be free to continue to evolve.”

From CTIA — the Wireless Association, a statement from Vice President of Regulatory Affairs Chris Guttman-McCabe, excerpts:

As we have said before, we are concerned about the unintended consequences Internet regulation would have on consumers considering that competition within the industry has spurred innovation, investment, and growth for the U.S. economy.

As a justification for the adoption of rules, the Chairman suggested that one reason for concern ‘has to do with limited competition among service providers.’ This is at the core of our concerns. Unlike the other platforms that would be subject to the rules, the wireless industry is extremely competitive, extremely innovative, and extremely personal. How do the rules apply to the single-purpose Amazon Kindle? How does it apply to Google’s efforts to cache content to provide a better consumer experience? How about the efforts from Apple and Android, Blackberry and Nokia, Firefly and others to differentiate the products and services they develop for consumers? Should all product and service offerings be the same?

Note, as well, Guttman-McCabe’s comments on investment.

(continue reading…)

The Federal Communications Commission has launched a new website — www.openinternet.gov — which features today’s speech at the Brookings Institution by FCC Chairman Julius Genachowski, “Preserving a Free and Open Internet: A Platform for Innovation, Opportunity, and Prosperity.”

Chairman Genachowski proposed making the four principles of Internet openness as Commission rules and adds two more:

Fifth Principle of Non-Discrimination

The fifth principle is one of non-discrimination — stating that broadband providers cannot discriminate against particular Internet content or applications.

Sixth Principle of Transparency

The sixth principle is a transparency principle — stating that providers of broadband Internet access must be transparent about their network management practices.

Genachowski said he would distribute proposed rules to his FCC colleagues and follow through with a proposed rule-making to bring the public into the process.

He added:
• The FCC will look at each violation on a case-by-case basis;
• Adherence to these principles would not require the disclosure of consumer PII, economically sensitive data, proprietary technologies, or network management strategies; and
• These principles would apply to all modes of internet access, including mobile architectures.

To this layman, it seemed like a very general speech. The Chairman argued, “This is not about government regulation of the Internet. It’s about fair rules of the road for companies that control access to the Internet. We will do as much as we need to do, and no more, to ensure that the Internet remains an unfettered platform for competition, creativity, and entrepreneurial activity.” Good!

Various items popping up about net neutrality, i.e., expanded federal regulation of broad-band services. There hasn’t been too much discussion this year after it was an especially hot topic in 2006 but the election reinvigorates the debate.

CBS News, From the Road blog:

(LAKE WORTH, FLA.) – Google CEO Eric Schmidt joined Barack Obama on the campaign trail today, adding fuel to speculation in the blogosphere that he is aiming for a cabinet position.

Wall Street Journal, October 17 editorial, “A Liberal Supermajority“:

Special -interest potpourri…Google and MoveOn.org would get “net neutrality” rules, subjecting the Internet to intrusive regulation for the first time.

Heritage Foundation, The Foundry blog, “Consumer Education, Not Heavy Net Neutrality Regulation, Is the Answer“:

According to the Financial Times, the leading think-tank Copenhagen Economics will release a study next week showing that “broadband prices could rise by up to one-third if regulators in Europe insist on strict ‘net neutrality’ rules.” The reports warns that letting politicians dictate how internet service providers manage their traffic flows will “pass on the cost of scarcity to all consumers” and significantly increase broadband prices thus depressing broadband demand.

The Heritage Foundation hosted FCC Commissioner Robert McDowell today at the weekly Blogger’s Luncheon, ostensibly to apologize for the FCC rapping Comcast on the knuckles, all in the name of Net Neutrality. Commissioner Deborah Taylor Tate joined Commissioner McDowell in voting against the majority in demonizing Comcast, as they saw that there was no evidence that Comcast actually did anything wrong. For those of you who have better things to do on a summer day than pay attention to the FCC, here’s a quick and dirty recap of the issue: Comcast network managers spotted a huge spike in bandwidth during a period of peak Internet usage, tracing it to kids downloading hundreds of megabytes of movies and music from BitTorrent, a media downloading site. Acting as traffic cops, Comcast decided to slow down the flow of bits from BitTorrent in favor of traffic from other applications and sites that are more dependant upon the speedy flow of bits, such as VoIP.

In the words of Net Neutrality pundits, they’ve committed the sin of Internet Discrimination. It would seem as if the FCC agrees as well. In a series of public hearings a la traveling road show, Comcast was held up for the masses to pelt them with rocks and garbage while yelling “burn the witch.” In a turn worthy of John Cleese and Eric Idle, the FCC on August 1 decided to do just that, and ordered Comcast to stop impeding traffic on the Internet and make transparent their policies to their customers, lest they be whacked with fines. Okay, maybe it wasn’t a burning per se, more like an uncomfortable stay in the sauna, but the intent was there.

But what did Comcast do to deserve this punishment? They violated the FCC’s Broadband Policy Principles. Let me reiterate the last part: PRINCIPLES. Not laws, not regulations, not rules, but principles (See ‘em here). They were developed with no public hearing, no notice of rule making, no due process. Legally speaking, they’re most likely unenforceable. The sad part is that Chairman Martin yelled “witch,” too.

But Comcast sinned, did they not? Phooey. In reality, they’ve practiced the virtue of Responsible Network Management. In their role as a traffic cop on their stretch of the Information Superhighway, they saw a bandwidth hog that would’ve backed up rush-hour traffic and they took it out of the HOV lane.

Commissioner McDowell said that this will be very easy for Comcast to appeal, as the FCC has no rules in place for this, thus no authority to enforce anything. Citing the “Brand X” Supreme Court Decision (stating that cable Internet companies provide “information services” governed by Title I of the Communications Act and are not “telecommunications services” under Title II), the cable companies are under no obligation to treat all traffic equally. That’s the law.

Talk to anyone who knows anything about network management and they’ll tell you that the Internet is ALL ABOUT discrimination – choosing which packet needs priority over another. For instance, it’s more important that VoIP packets get priority over a packet with part of the best sports clip ever filmed because a VoIP call requires complete synchronicity lest confusion, echoing and dead silence ruin the call. If my sport clip packet is delayed because of your VoIP packet got priority, the clip may download in 12 seconds instead of 10. That’s something I can live with.

But what if this is some kind of nefarious plot from Comcast to slow down the Internet sites that compete with them? Commissioner McDowell says to check out the Sherman Antitrust Act and the Clayton Act as your remedy. Tried and tested, it’s been around since 1890 and is reasonably sure to have the most evil of corporate malfeasors quaking in their Bruno Magli wingtips as soon as they see the summons.

Maybe in the end, the Comcast decision will be a good thing – if upheld, it’ll show Congress that the process works and the FCC is protecting the interests of the Internet consumer, and there’s no need for intrusive legislation. I suggested this to Commissioner McDowell, and he told me in so many words to go and click my ruby heels together (in a polite way, of course). “Appeasement doesn’t work,” were his exact words. Ah, well.